Dáil Éireann Debate, Thursday - 18 April 2019
3. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform the role his Department is playing in relation to the tendering process for the national broadband plan; if the role of his Department when it comes to the tendering and construction of major capital projects will change in the future; and if he will make a statement on the matter. [18079/19]
Amharc ar fhreagraThere is great disappointment, dismay, frustration and even anger at the Government's and Fine Gael's collective failure to deliver on the commitment made by the then Deputy and former Minister, Mr. Pat Rabbitte, to deliver broadband to every household in the country at a cost of €500 million. The Taoiseach's mutterings in recent days suggest that will not now be the case. What role have the Minister and his Department played in seeking to ensure that commitment could be lived up to? What processes are in place to ensure due diligence and evaluation during the awarding of a contract to protect the best interests of the taxpayer? The Taoiseach is failing to live up to the commitment he made. He stated this was a personal crusade. This project has the potential to unravel in a similar fashion to the national children's hospital project, unfortunately. I want the Minister to allay that fear.
Under the public spending code, before any tender process is run, the relevant procuring Department must first undertake a project appraisal to help inform whether the project should be approved to proceed to procurement or not. At that stage, my Department is involved in conducting a technical review of the cost benefit analysis undertaken by the line Department. In this case it is the Department of Communications, Climate Action and Environment. It reviews the methodology and compliance with the requirements of the public spending code in advance of any decision being taken by the line Department on whether to proceed to procurement or tender stage.
The public spending code further requires that the project appraisal is continually updated as the procurement process evolves and as actual tender costs, as opposed to cost estimates, become available. My Department may be consulted to review technically the updated cost benefit analysis. That is the case with major projects such as the tender for the national broadband plan. While my Department is not involved in the assessment of the tenders for individual projects, if it emerges that the cost of a project is not capable of being met within the agreed multi-annual capital allocation of the procuring Department, then that Department should engage with my Department to explore how to proceed with the project. That is what is happening now with the national broadband plan process.
In addition, the Office of Government Procurement was represented in an advisory role on the procurement board for this project. The primary aim of this board is to independently review the Department of Communications, Climate Action and Environment's oversight of the evaluation stages of the procurement process but has no decision making or due diligence role in the procurement process. That is a matter for the Department of Communications, Climate Action and the Environment.
I think that is quite amazing, unfortunately, especially considering we have spoken about the lessons we expect to learn from the recommendations of the PwC report regarding the national children's hospital. The Minister is, essentially, stating he has no role regarding evaluation or due diligence, apart from the Vote provided funding in a given year. The Minister has stated, however, that his role crystallises when spending costs get out of control. I refer back to the Minister's answer. It is similar to an answer he gave me in response to a parliamentary question earlier this month: "The Office of Government Procurement was represented in an advisory role on the procurement board for this project". The primary aim of the board is to review independently, as the Minister rightly states, the Department's oversight of the evaluation stages of procurement. No decision-making responsibility, however, lies with the Minister's Department.
That brings us back to the Office of Government Procurement. The Minister's Department has a representative on that, as it had in regard to the same office and its role regarding the national children's hospital project. The spending there went out of control to the extent that it was six times the original spending that the Government estimated would be needed to deliver the project. Was the Minister not informed? What oversight role does the Department of Public Expenditure and Reform really have? What prudence can it engender in other Departments? We do not seem to have learned lessons from the recommendations of the PwC report because the Office of Government Procurement, with a representative from the Minister's Department, is again not informing a line Minister.
Deputy Cowen is making many assumptions regarding how this project is going to develop and those assumptions have yet to be tested. The Deputy's view is underpinned by an assumption that I am not aware or not involved in what the cost of this process will be or decisions that will be made regarding it. I am actively involved in all of that. I have laid out what the process is to the Deputy and I think it is an understandable one. My Department is involved in the cost benefit analysis and the estimation of costs at the start of the project. My Department will also be involved if there are any developments regarding the cost benefit analysis. The key difficulty regarding the national children's hospital project was the development in the cost and complexity of the project.
Regarding where we are with the broadband plan, it is fair to say the complexity and challenge in delivering the project has been identified in an exhaustive tendering process.
I ask for a final clarification on the role of the Department of Finance in the delivery of the broadband plan and contract, ultimately to homes. There was a cost-benefit analysis in the first place, which the Minister acknowledged was in the region of €500 million in respect of the Government's contribution. According to the Taoiseach, it now transpires that the level of expenditure on the part of the State will be more in line with €3 billion, which is six times the original estimate. Am I to believe the Minister's representative on the Office of Government Procurement, OGP, has not yet informed him of the likely overrun in this area? Surely, the Minister was informed given that the Taoiseach can say it will be €3 billion over 25 years. What level of discussion, thinking or process was involved to allow him to give that answer in the Dáil the other day? I just want to be sure and certain, as taxpayers should be, that the Minister and his Department are on top of this and aware of what is going on and that they acknowledge the difficulties within the procurement process which mean it is now six times the original estimate provided by Government. Is the Minister actively engaged in resolving this issue?
As the Deputy will be aware and as the Taoiseach said yesterday in the Dáil, the €500 million indicative figure that previously existed in respect of this project was for a completely different level of coverage from the level we are now looking to deliver.
That is where we differ.
As the Taoiseach indicated yesterday, the memorandum referred to how we were going to get to villages but this is now a project seeking to provide coverage for up to 500,000 homes.
That is a line the Government is throwing out there now.
If the Deputy is asking me whether I am aware of, and involved in, the process regarding where the costs stand, the answer is "Yes." When the decision goes to Cabinet, it will be on the basis of costs and complexities which are known and understood and I will continue to play a role as member of Government in the decision-making process at that point in particular.
